$8$:$30$

$.$ ll LTE

Case $14-62($Algo$)$ Adding a Product Line $($LO $14-4,14-5)$

Bo Vonderweidt, the production manager for Sportway, had requested to have lunch with the company president. Vonderweidt wanted to put forward his suggestion to add a new product line. As they finished lunch, Meg Thomas, the company president, said, "TII give your proposal some serious thought, Bo$.$ I think you're right about the increasing demand for skateboards. What l$\text{'}$m not sure about is whether the skateboard line will be better for us than our tackle boxes. Those have been our bread and butter the past few years:

Vondenweidt responded with, "Let me get together with one of the controller's people. We'll run a few numbers on this skateboard idea that I think will demonstrate the line's potential".

Sportway is a wholesale distributor supplying a wide range of moderately priced sports equipment to large chain stores. About $60$ percent of Sportway's products are purchased from other fompanies while the remainder of the products are manufactured by Sportway. The company has a Plastics Department that is currently manufacturing molded fishing tackle boxes, Sportway is able to manufacture and sell $12,000$ tackle boxes annually, making full use of its direct$-$labor capacity at avaliable work stations. The selling price and costs associated with Sportway's tackle boxes are as follows:

$\backslash$table$[[$Selling price per box,,$$95\mathrm{.}00$